The lending arm of crypto investment bank Genesis has suspended withdrawals and new loan originations. This comes as the bankruptcy of FTX continues to send ripples across the crypto industry.
Genesis said on Wednesday that its lending unit, known as Genesis Global Capital, got first hit by the downfall of Three Arrows Capital, a hedge fund that went under in July. Since then, the company had been derisking its book and “shoring up [its] liquidity profile and the quality of [its] collateral”, the firm said on Twitter.
However, in the wake of the blowup of FTX, Genesis saw “abnormal withdrawal requests” that eventually “exceeded [their] current liquidity” and forced it to halt redemptions.
Genesis Global Capital is known to be one of the top destinations for institutional clients. According to its website, the firm originated $8.4 billion in loans in the third quarter of this year. It has $2.8 billion in total active loans as of Q3 of this year.
Last week, Genesis revealed that it has about $175 million stuck in its trading account on FTX. In response, Digital Currency Group, the owner of Genesis, Grayscale, and other crypto companies, offered a $140 million cash infusion to strengthen…
